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Chapter 1
Introduction
Going green, green business, and sustainable business are topics on everyone’s mind. But what does
all this mean exactly? A Primer on Sustainable Business answers that question and provides an
1.1
A Background on Sustainability
We begin with an understanding of the background of the concept of sustainability and how it applies to the business world. In 1987, the Brundtland Commission put forth a “global agenda for change”
with the purpose of “furthering the common understanding and common spirit of responsibility so
clearly needed in a divided world.”[1] The report outlined the following description of sustainable
development:
1. Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:
a. the concept of “needs,” in particular, the essential needs of the world’s poor, to which overriding priority should be given; and
b. the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.
2. Thus the goals of economic and social development must be defined in terms of sustainability in all countries—developed or developing, market-oriented or centrally planned. Interpretations will vary, but they must share certain general features and must flow from a consensus on the basic concept of sustainable development and on a broad strategic framework for achieving it.
3. Development involves a progressive transformation of economy and society.[2]
The concepts of sustainable development and sustainability have since been applied to numerous
topics. To understand this definition in terms of business, we will define sustainable business as one that operates in the interest of all current and future stakeholders in a manner that ensures the
long-term health and survival of the business and its associated economic, social, and environmental
systems. Thus a sustainable business is concerned about the current and future social,
environmental, and economic impacts associated with its operations. Ideally, the sustainable
business seeks to have a positive social impact, a reduced negative environmental impact, and a
positive economic impact (social, environmental, and economic impact will be discussed in further
detail in Chapter 2 "Operations Management"). The business that focuses exclusively on reduced
green.” A Primer on Sustainable Business is concerned with the larger picture, or the combined
three-dimensional social, environmental, and economic impacts of a sustainable business, that is, the
ability of the business to meet present needs while ensuring long-term survival for future
generations.
Sustainable (and green) business became mainstream practically overnight; sustainability has
transitioned from hippie to hip. This growth in interest in sustainable business practices stems from
changing societal expectations and a growing awareness that sustainability creates a win–win
situation for the business and humanity alike. The emphasis on sustainable business operations and
practices is expected to intensify in the future, particularly given the passage of the American
Recovery and Reinvestment Act of 2009, which gives priority to sustainability-related investments in
the American economy.
Businesses practicing sustainability improve their image and reputation, reduce costs, and help
boost the local economy, all of which lead to improved business and stronger and healthier local
communities for operations. Furthermore, these benefits set one company apart from its competitors
and can become a source of competitive advantage. This book will provide a rich array of business
examples demonstrating a variety of approaches in which businesses seek to maximize social,
environmental, or economic impacts and any combination of the three in order to become a
sustainable business.
The company that seeks to be a sustainable business should understand that sustainability is a
company-wide goal that incorporates every aspect of the business and its relationships. In other
words, sustainability requires systems thinking. Systems thinking is the awareness and
understanding that everything is related in some way and that nothing exists in isolation. Every
person, every department, every business, every industry, and every society are interrelated and
connected in some way. Therefore, it is understood that each part of the business has a contribution
to make in helping the company become a sustainable business. That is, the daily operations,
research and development, management information systems and information technology, human
a different way, yet through A Primer on Sustainable Business you will begin to see the great degree of
interconnectedness between each part of the business. Because sustainability is a company-wide
philosophy or way of thinking, there will be much coordination required between the various parts of
the business and there will ultimately be overlap. The contribution of each area of the business is
critical to the overall success of becoming a sustainable business.
A Primer on Sustainable Business is divided into two sections. Chapter 1
"Introduction" through Chapter 9 "Next Steps: Sustainability Strategy" are organized along common
business functional areas to allow the reader to see how each aspect of the business has a unique
contribution to make in helping the business pursue the overarching goal of sustainability.
In Chapter 2 "Operations Management" of this section, we discuss how sustainability is at the heart
of company operations. We further explore what the term sustainability means and its emphasis on
the triple bottom line. In Chapter 3 "Human Resources", we show how sustainability is related to the
human resources function of the company. We organize the discussion by the components of human
resources management: recruitment and selection, training and development, performance appraisal
and feedback, and pay and benefits. Our human resources chapter concludes with a discussion on
human rights issues. In Chapter 4 "Finance", we discuss how sustainability impacts the function and
industry of finance. In the finance function, we review how sustainability considerations play into
capital investments and financial investments as well as measures of firm performance. In the
finance industry, we discuss how sustainability has generated a new area of finance, carbon finance,
and how sustainability impacts the areas of banking and insurance. In Chapter 5 "Research and
Development", we discuss sustainability within the context of the research and development function
and show how sustainability is generating new ways of thinking when it comes to research and
product design. In Chapter 6 "Marketing", we discuss sustainability within the common components
of marketing: product, price, place (distribution), and promotion. Chapter 7 "IT and MIS" discusses
how sustainability can help increase efficiency, reduce costs, and track key indicators through
information technology and management information systems. Chapter 8 "Accounting" discusses
Finally, Chapter 9 "Next Steps: Sustainability Strategy" discusses sustainability as an integral
component of the overall strategic direction of the firm.
Chapter 10 "Sustainable Business: Case Examples" of the book begins with real case examples of
sustainable business practices. We provide very brief examples of over 50 businesses implementing
sustainability into their daily operations. Finally, the book concludes with an appendix featuring a
list of resources gleaned from each chapter. These resources are the organizations mentioned
throughout each chapter to which a business may turn for information, guidance, and assistance on a
particular area of expertise.
As you read A Primer on Sustainable Business, we challenge you to not think of sustainability as a
program, an initiative, or an activity. Rather, sustainability is a mind-set, a philosophy, and
worldview. Throughout each chapter, you are challenged to alter the way you view your job, the
workplace, the business, and the world. Whether you are an executive, an entrepreneur, or an
employee, A Primer on Sustainable Business will help you understand the big picture of what it means
to be a sustainable business and will give you the information you need to begin your journey toward
sustainability.
[1] Brundtland (1987).
Chapter 2
Operations Management
Business operations are at the heart of sustainability. You cannot become a sustainable business
without honestly and critically analyzing your current operations and considering the changes
necessary to move toward sustainability. In this chapter, we will explain the three dimensions of
sustainability and will provide examples of businesses focused on each dimension. In Chapter 10
"Sustainable Business: Case Examples" of this book, we provide numerous examples of sustainable
business practices. The examples here and in Chapter 10 "Sustainable Business: Case Examples" will
2.1
Sustainable Business
Recall from Chapter 1 "Introduction" that a sustainable business is one that is concerned about the
social, environmental, and economic impacts associated with its current and future operations and
the ability of the business to meet present needs while ensuring its and others’ long-term survival.
Ideally, the sustainable business seeks to have a positive social impact, environmental impact, and
economic impact. Taken together, a business’s contribution to social justice, environmental quality,
and economic prosperity is collectively referred to as the triple bottom
line.[1] The triple bottom line (social, environmental, economic) is sometimes referred to as people,
planet, profit.
Once considered the purview of governments and nonprofit organizations (such as Heifer
International, a global leader in developing sustainable communities), businesses are increasingly
being called upon to address social, environmental, and economic issues. Rethinking the business in
terms of its triple bottom line impact and performance (social, environmental, and economic) is
critical in establishing the foundation for sustainable business. This requires a shift away from
thinking of a business only in terms of its financial profit to shareholders. While financial profit is
necessary for survival, the sustainable business applies a broader view of the business, its
responsibilities, and its performance. Therefore, the sustainability of business is discussed in terms
of three interrelated and interconnected dimensions: social, environment, and economic.
[1] Elkington (1997).
2.2
Social Impact
The first dimension of a sustainable business is its performance relative to societies and social
justice, often referred to as social impact. While there is no easy solution for reducing social costs while improving corporate performance and profitability, social impact should not be overlooked.
The social impact of a business’s operations is viewed both internally and externally and ensures that
the business’s entire operations across the supply chain are socially responsible and ethical.
Internally, the social impact of a business often refers to practices related to employees and
employment with the business. The sustainable business’s social impact would include such items as
the business’s practices and policies related to working conditions, diversity in hiring, opportunities
for advancement for women and minorities, lack of discrimination, and the provision of affordable
health care and other necessary benefits. In addition, social impact includes wages, breaks,
adherence to employment laws, safety, training, and numerous other specific labor practices. Finally,
social impact includes the impact on the local public and social services sector as a result of the
business’s activities. These are only a sample of the many items considered within the social impact
of a business’s operations. Many of these internal social impacts are discussed in greater detail
in Chapter 3 "Human Resources".
The sustainable business is not only expected to treat its employees in a responsible manner but also
ensure that it is engaged with suppliers that share similar values. That is, a sustainable business is
also concerned for the labor practices and working conditions of companies within its supply chain
to ensure that the supplies and products it purchases were produced responsibly and ethically.
Sustainable businesses will make reasonable efforts to ensure they are not purchasing from suppliers
engaged in the use of sweatshops, child labor, or other human rights abuses. In some cases,
businesses have worked diligently with suppliers to correct these problems, while in other cases
businesses have chosen to change suppliers.
When sourcing products from outside an industrialized country, some sustainable businesses will
and that fair and ethical employment practices were used in the creation of products. Many
agricultural goods and handicraft items are Fair Trade certified.
In addition to employment practices, social impact refers to respect of others. This entails the respect
of individuals and other businesses encountered locally and around the world. A sustainable
business will make reasonable efforts to ensure its policies, practices, products, advertising, logo or
mascot, and other aspects of the business are not offensive or disrespectful to clients in the global
market. See Note 2.3 "Tips to Increase Your Social Impact" for tips on how to increase the social
impact of your business.
Tips to Increase Your Social Impact
Have you considered where your coffee, chocolate, clothing, or other products come from and the conditions under which they were produced? Social impact is one of the three pillars of a sustainable business, but it can be difficult to define and even more difficult to track and measure.
A sustainable business should consider the social impact of its business operations on employees, those employed throughout the supply chain, and on the community. So how can a business begin to maximize its social impact? Here are some practices that will help create positive social impact:
1. UN Global Compact: Review the 10 principles of the United Nations Global Compact and abide by them, whether or not the business becomes a signatory.
2. Buy Fair Trade: Seek out opportunities to purchase Fair Trade products for your business. Fair Trade products ensure that those who produced the product in developing countries were paid a fair wage under humane working conditions. You can purchase Fair Trade clothing, handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, flowers, and other products.
3. Company policies and practices: Consider the social impact of your company’s policies and practices on employees (such as health care coverage, educational opportunities, and worklife balance). 4. Philanthropy: Evaluate the impact of your corporate giving programs. Find opportunities that are
5. Supply chain: Understand the conditions under which the products and supplies you purchase were produced; work with suppliers to achieve transparency throughout the supply chain; check the Web sites of any of the numerous watchdog organizations (e.g., CorpWatch, Sweatshop Watch,
International Labor Rights Forum) to find world regions, specific companies, and industries known for human rights abuses that could be occurring within your supply chain.
6. Labor: First, make sure your business follows policies and practices that are fair to its labor force; a good place to start is SA8000 and the International Labour Standards; review and understand the standards, whether or not your business seeks certification; support freedom of association, collective bargaining, and nondiscrimination in your own place of business as well as with suppliers; in
purchasing, avoid products that were produced using forced and child labor. See Green America’s 9 Cool Ways to Avoid Sweatshops,
http://www.coopamerica.org/programs/sweatshops/whatyoucando/9coolways.cfm; look for
certifications from Fair Trade Federation, Fair Labor Association, Social Accountability International, RugMark, Verite, Worker Rights Consortium, or others that have independently evaluated labor conditions.
7. Social responsibility: Check out the 2010 release of the ISO 26000 standards on social responsibility for companies.
TOMS Shoes is an example of a company making a commitment to maximize its social impact. In
2006, Blake Mycoskie founded TOMS Shoes with the singular mission of improving the lives of
children by providing shoes to those in need. Shoes are produced in Argentina and China following
fair labor practices while creating minimal environmental impact. Factories are monitored by TOMS
and third-party independent auditors. TOMS Shoes are sold online and in retail locations around the
world with the promise that for each pair purchased, TOMS will donate a second pair to a child in
need in Argentina, South Africa, and other locations around the world. The public is invited to
participate in “shoe drops” around the world and to experience firsthand the social contribution of
2.3 Environmental Impact
The second dimension of a sustainable business is its contribution to preserving environmental quality; commonly referred to as environmental impact. Numerous examples exist of companies reducing environmental costs while simultaneously improving company performance and profitability. The environmental impact of a business’s operations is viewed both internally and externally. The business that focuses exclusively on its environmental impact, rather than focusing on the triple bottom line emphasis of a sustainable business, is referred to as a green business.
Internally, the environmental impact of a business often refers to practices related to use of natural resources, waste, toxicity, and pollution. For manufacturing companies, the environmental impact can be large and efforts are generally made to reduce waste, toxicity, and pollution within the manufacturing process. International Organization for Standardization (ISO) 14000 is one example of guidelines for firms on environmental practices and reduced impact.
For service companies, the environmental impact is smaller but should not be overlooked. Consider, for example, the amount of waste the company pays to have removed; chemicals used that eventually find their way into the air, water, or ground (such as cleaning compounds, fertilizers, weed killers, and many others); and pollution created by energy usage, employee commutes, or business travel.
Green building (or remodeling) is a fast growing trend among businesses that wish to be more
sustainable. Green building refers to the reduction of environmental impact in the design, construction, and ongoing life of the building. The most frequently utilized standards for green building are the Leadership in Energy and Environmental Design (LEED) of the U.S. Green Building Council.
Recycling programs are often part of a sustainable business’s efforts to reduce waste and toxicity. Sustainable companies consider both the purchase of recycled items for office supplies, furniture, and other needs, as well as recycling or donating its own unwanted items. While most companies or offices may already recycle paper, aluminum cans, and plastic bottles, there is little that cannot be recycled today. For example, clever artists and designers make purses and handbags from recycled soda pop tabs,
another example of recycling, Caracalla, a salon and day spa in Little Rock, Arkansas, recycles cut hair by sending it to the nonprofit Matter of Trust to be woven into hair mats capable of absorbing chemical oil spills. Many restaurants recycle used grease through companies that purchase “yellow grease.” Companies can also recycle office furniture and equipment through donations to charitable giving programs at schools and other nonprofits. Numerous options exist to recycle or donate electronics. If you cannot find a suitable place to recycle or donate your company’s unwanted items, consider turning to The Freecycle Network, an online site to give away unwanted items. Many organizations, such as the Zero Waste Alliance, help businesses minimize waste and toxicity. Before discarding anything, the sustainable business will exhaust all possibilities in identifying a second life for the product.
Externally, the sustainable business also considers the environmental impact of suppliers in terms of services and products as well as transportation of goods. A sustainable business will seek out suppliers of services and products that are environmentally friendly. This results in the purchase of products that produce less waste, are less toxic, and generated the least amount of pollution in manufacturing and transportation. Sustainable businesses opt for local suppliers, when possible, in order to reduce the environmental impact caused through the transportation of goods.
Additionally, many sustainable businesses create a green procurement policy, or environmentally preferred purchasing policy, as an integral part of their operations to give preferential purchasing to products and services that are most environmentally friendly. An environmentally preferred purchasing policy would cover all types of products and services purchased by the organization. For example, this policy would give preference to green cleaning products that are less harmful to employees and the environment; or preference to Forest Stewardship Council (FSC) certified wood products that come from sustainably managed forests. As with other attempts to reduce environmental impact, a move toward green procurement can offer cost savings for the sustainable business. For example, Little Rock Athletic Club discovered that if it made the switch to recycled copy paper, the company could achieve a 10% cost savings, 13% fewer carbon dioxide emissions, and 35% fewer trees used when compared to the previous paper products. See Note 2.6 "Tips to Green Your Office" for more tips on how to green your office.
Here are some steps that your office can take to reduce your environmental impact (and save money!):
1. Use e-mail instead of paper.
2. Print and copy on both sides of the paper.
3. Buy recycled paper with the highest percentage of recycled content. 4. Use environmentally friendly cleaning supplies and detergents. 5. Purchase refillable office products (cartridges, pens, etc.). 6. Unplug items not in use or not used frequently.
7. Switch to a green hosting service for your Web site. 8. Report and repair water drips and leaks immediately. 9. Start a vanpool or carpool program.
10. Create a green team to continue the work toward greening your office or workplace.
There are two additional considerations in determining a company (and supplier’s) environmental impact: water efficiency and energy efficiency. When a sustainable business considers water usage—often referred to as a water footprint—it is seeking ways to become more efficient by reducing its use of fresh water or increasing its recycle rate for water. For example, some businesses have collected water from sink, water fountain, shower, dishwasher, and washing machine drains (collectively referred to as greywater systems) or installed rainwater collection systems to recycle water for use in landscaping, decorative water features, and to flush toilets.
When a sustainable business considers energy usage (often referred to as a carbon footprint or energy audit), it is seeking ways to become more efficient and reduce its energy usage. Through an energy audit, many companies have identified sources of wasted energy and accompanying opportunities to become more energy efficient. For example, in the past, landfills often burned off methane generated from decaying waste. Technologies now allow landfills to cap the methane and use it as a renewable energy source.
scientific information related to climate change, please visit the Web site of the 2007 Nobel Peace Prize winner, Intergovernmental Panel on Climate Change: http://www.ipcc-wg2.org). All other types of greenhouse gases are measured in their CO2 equivalents; thus reference to carbon is the standard metric. As a result of the large energy usage and subsequently large carbon emissions (or carbon footprints), many businesses are actively engaged in finding ways to reduce carbon emissions by becoming more energy efficient.
The reduction of carbon emissions, or a reduction of the business’s carbon footprint, is particularly appealing to businesses today partly because of the possibility of a future carbon tax and the growing carbon trade market (see Chapter 4 "Finance"). A carbon tax is enacted and regulated by the government and would add a tax to businesses based on the amount of carbon they emit in their daily operations. A carbon emissions trading system allows businesses to trade “credits” for carbon emissions. Emissions trading, sometimes referred to as a cap-and-trade system, is enacted and regulated by the government, which determines a maximum amount (or cap) of carbon emissions permitted by businesses. Businesses with emissions in excess of the cap will be required to purchase carbon credits (or carbon allowances) from businesses with emissions less than the cap and that have excess carbon credits to sell. There are already several cap-and-trade systems in place.
European Union Emissions Trading Scheme. The European Union has had a mandatory cap-and-trade system since 2005, the European Union Emissions Trading Scheme. It is the largest multinational, multisector system in the world.
New South Wales Greenhouse Gas Reduction Scheme. The New South Wales Greenhouse Gas Reduction Scheme began in 2003 and is a voluntary regional initiative in Australia. The prime minister of Australia will be expanding this system into a mandatory national market by 2010. New mandatory systems are also being considered by leaders in Japan and Canada.
Kyoto Protocol. The Kyoto Protocol is a voluntary multinational, multisector cap-and-trade system. According to the cap-and-trade system, companies from 39 Kyoto Protocol participating industrial nations have a cap on the amount of greenhouse gases to be emitted. Companies are issued carbon permits for their portion of the allocated emissions. The system also allows for emissions trading between member countries. Under the Protocol, industrialized nations can earn emissions credits (or carbon credits) for investing in clean technology projects in emerging economies.
In the United States, the only industrialized country in the world that has not ratified the Kyoto Protocol, there is an emerging infrastructure of voluntary cap-and-trade systems and emissions trading markets. These have arisen in response to the growing awareness of the impact of business activities on the environment as well as in anticipation of a forthcoming mandatory system. For example, as part of the solution to global warming, U.S. President Barack Obama supports the creation of a market value in ecosystem sustainability.[1] His plan would put forth a goal to reduce carbon emissions to 80% below
1990 levels by 2050, although there is no current mandatory mechanism in place to support or enforce this goal.
Chicago Climate Exchange. The Chicago Climate Exchange (CCX) is the most well-established North American voluntary cap-and-trade program. Although voluntary, the CCX becomes legally binding and provides third-party independent verification. The CCX also trades carbon futures through the Chicago Climate Futures Exchange.
Regional Greenhouse Gas Initiative. The Regional Greenhouse Gas Initiative (RGGI) is the first regional mandatory system in the United States. The initiative is administered by 10 Northeastern and Mid-Atlantic states to cap emissions and trade carbon permits. Rather than allocating carbon permits to businesses for free, the RGGI held its first auction of permits in September 2008 and raised $39 million to allow the participating states to invest in energy efficiency and renewable energy technologies.[2] RGGI
Western Climate Initiative. The Western Climate Initiative is an initiative of several Western states and Canadian provinces. Although this partnership initiative was created in 2007, a cap-and-trade system is being explored but has not yet been implemented.
Midwestern Greenhouse Gas Reduction Accord. The Midwestern Greenhouse Gas Reduction Accord is an initiative of many Midwestern states and the Canadian province of Manitoba. It is a joint agreement established in 2007 to make efforts to reduce greenhouse gas emissions, although no cap-and-trade system is in place.
At this time, reduction of carbon emissions is voluntary in the United States and none of the
aforementioned cap-and-trade systems is binding for U.S. businesses. Nonetheless, as mentioned, the possibility of mandatory carbon reductions has led businesses to analyze energy usage and carbon emissions and seek ways to reduce usage and emissions.
The first step to becoming more energy efficient is to conduct an energy audit(of the company’s energy usage) or carbon footprint analysis (of the company’s full range of operations) to gather baseline data reflecting current energy usage and subsequent carbon emissions from operations. The business can determine the scope of the analysis to be conducted. In a carbon footprint analysis, Scope 1 emissions will measure the direct emissions from energy created on-site through facilities owned by the company. Scope 2 emissions will measure the indirect emissions that result from the company’s purchase of off-site energy through facilities it does not own. Scope 3 emissions will measure other indirect emissions from sources the company does not own and which are created through business activities required to keep the physical facility in operation, such as employee and customer commutes. Scope 3 emissions also consider indirect emissions throughout the company’s supply chain as a result of the purchase of services and goods required for the business.
energy from renewable sources (as detailed below in the discussion of renewable energy projects). Within the area of waste, companies will actively seek ways to reduce their own waste as well as purchase supplies with minimal packaging. Within the area of travel and transportation, the sustainable business will encourage the use of public transportation, telecommuting, ride sharing, flexible work schedules, and fuel-efficient cars for employees. Additional considerations are environmentally friendly alternatives for product and supply transport, such as increased fleet efficiency, the use of second-generation biofuels (or fuel created from waste), and local sourcing to reduce the number of miles products and supplies travel to reach their final destination.
Once the company has explored alternatives for carbon emissions reductions, the company will develop a plan for reducing energy usage and carbon emissions. The carbon reduction strategy (sometimes referred to as a climate change strategy, climate mitigation strategy, or climate abatement strategy) is a detailed plan of measurable specific goals with specific actions that will be taken and deadlines for achievement. Progress is then measured regularly (often annually or biannually) to determine progress toward the goals of reduced energy usage and carbon emissions.
After a business has done all it can to become energy efficient, it often seeks to compensate for the remaining unavoidable carbon emissions it is creating through its operations. This step is important in the plan if the business’s goal is to become carbon neutral (sometimes referred to as zero carbon
Carbon offset projects are not currently regulated; therefore, third-party independent verification of the project should be a part of any investment made in carbon offsets by sustainable businesses. Additionally, the type of project should be carefully scrutinized before purchasing carbon offsets. For example, there is controversy over the value of planting trees as a carbon offset since actual carbon removed from the air is dependent on many factors, such as climate, soil, type of tree, age of tree, survival rate of saplings, and so on. It is worthwhile to read third-party independent research comparing carbon offset projects and companies, such as those provided by Kollmuss and Bowell,[3]Clean Air-Cool Planet,[4] and others. The
state of Colorado and the city of San Francisco have both created local carbon offset programs to ensure any business’s (or individual’s) purchase of carbon offsets goes to fund local projects.
One of the leading examples of corporate environmental impact can be documented through Wal-Mart. In 2005, CEO Lee Scott created a sustainability vision for Wal-Mart and set forth three ambitious goals: to be supplied 100% by renewable energy, to create zero waste, and to sell sustainable products. According to the company’s latest progress report, Wal-Mart continues to experiment with the design of stores and its fifth-generation prototype store uses up to 45% less energy than a typical Supercenter.[5] In 2007, the
company purchased enough solar power for 22 facilities,[6] and in 2008 the company purchased enough
wind power for 360 stores and facilities,[7] both of which will reduce greenhouse gas emissions. The
company has achieved a 25% efficiency improvement in its trucking fleet and has recently installed small efficient diesel engines that allow parked truckers to turn off the motor engine and use the smaller engine for heating and cooling. This is expected to save the company $25 million, 100,000 metric tons of carbon emissions, and 10 million gallons of diesel fuel annually.[8] The company is working with its trucking
suppliers to manufacture more aerodynamic and fuel-efficient trucks. The company has also introduced a sustainability scorecard in working with product suppliers to make products with less packaging waste. These few examples represent only a fraction of the environmental improvements made by Wal-Mart over the past 4 years. See Note 2.13 "FREE Ways to Begin Greening Your Business" for small changes you can make to green your business.
Here are some tips for the business that wants to start the journey toward green but does not have the funds to implement big changes. All the tips below are free to implement but require a change in behavior away from current practices.
1. Office paper: Switch from 100% virgin fiber paper products to recycled paper products. For example, we recently compared a business’s current office and copier paper purchases to recycled office and copier paper. The final combination of paper choices recommended to the client represented a 10% cost savings, 13% fewer carbon dioxide emissions, and 35% fewer trees used when compared to their previous product. Other recycled paper products to consider are file folders, hanging file folders, notebook pads, binders, calendars, posters, envelopes, business cards, letterhead, forms, self-stick notes, and anything else made from paper! Savings: cost reductions, carbon dioxide emissions reductions (carbon dioxide emissions contribute to climate change), and fewer trees used.
2. Hand towels: Switch from 100% virgin fiber hand towels to recycled content hand towels. In a recent comparison for a client, we were able to identify 100% recycled hand towels that represented a 2% cost savings over their current product. Savings: cost reductions, carbon dioxide emissions reductions, and fewer trees used.
3. Toilet tissue: Switch from 100% virgin fiber bath tissue to recycled content bath tissue. In a recent comparison for a client, we were able to identify 100% recycled bath tissue that represented a 46% savings over their current product. Savings: cost reductions, carbon dioxide emissions reductions, and fewer trees used.
4. Napkins: Switch from 100% virgin fiber napkins to recycled content napkins. In a recent comparison for a client, we were able to identify 100% recycled napkins that represented a 10% cost savings over their current product. Savings: cost reductions, carbon dioxide emissions reductions, and fewer trees used.
6. Lighting: Turn off lights when not in use, and when replacing, use more energy-efficient lighting, such as compact fluorescent bulbs or LED lighting. Savings: can help reduce energy bills.
7. Electronics and office equipment: Turn off when not in use, and when purchasing, make sure it is ENERGY STAR certified. Dispose of old electronics through a recycling program (most cities will take old electronics for recycling). Old office electronics, furniture, and equipment can also go to donation programs through public schools, Habitat for Humanity ReStore, or other worthy causes. Savings: can help reduce energy bills, can reduce the amount of waste you pay to have removed, and will keep dangerous chemicals out of landfills.
8. Recycling: Check with your city sanitation department (or check the Earth911 search engine) to see what can be recycled and where it can be recycled. Common items for recycling include aluminum cans, glass, paper, plastic (including plastic bags), cardboard, Styrofoam packaging (Styrofoam food containers are not often recycled), electronics, cooking oil or grease, printer and ink-jet cartridges, and many other items. Savings: can reduce the amount of waste you pay to have removed.
9. Employee coffee mugs or drink cups: Encourage employees to bring reusable coffee mugs or drink cups (and plates and utensils) rather than using disposables. Savings: can reduce the number of disposable items you purchase and can reduce the amount of waste you pay to have removed.
10. Office supplies: Use recyclable or refillable items, such as printer cartridges, pens, CD and DVD disks, batteries, and other products. Savings: can help reduce the amount of office items needing
replacement and can reduce the amount of waste you pay to have removed.
per year in paper and ink costs. Savings: can reduce the amount of paper you buy, can reduce the amount of waste you pay to have removed, and can reduce your company’s carbon emissions.
12. Cleaning supplies: Use green cleaning products or a green cleaning service. Savings: there may not be any financial savings here, but you are taking steps toward healthier indoor air quality, and your cleaning methods will be releasing fewer toxins into the environment.
13. Web site: Switch to a green or carbon neutral Web host provider. There are many Web host providers available that are competitively priced. Savings: cost savings and reduced carbon emissions.
14. Promotional products: Next time you purchase promotional products for your business, select those that are environmentally friendly, are made from recycled material, can be recycled, or those that are all three of these criteria, such as SIGG water bottles. Savings: there may not be any financial savings here, but you are taking steps toward being environmentally friendly and communicating that message to your customers.
15. Green team: Establish a green team of employees who are interested in helping your business become more environmentally friendly. The green team’s focus should be twofold: identifying additional ways to make your business more environmentally friendly and educating employees, customers, and suppliers on the importance of being environmentally friendly as well as communicating the business efforts and accomplishments in this arena.
Where do you find these products? You can begin by checking with your current supplier. If your supplier doesn’t carry the products, you can check with other local vendors, national suppliers, or online. If you implement the suggestions above, you will begin the journey toward green and will simultaneously save some green!
Source: Barakovic et al. (2009).
[1] Obama for America (2007).
[2] Gardner (2008).
[3] Kollmuss and Bowell (2007).
[4] Clean Air-Cool Planet (2006).
[5] Wal-Mart Stores, Inc. (2008a).
[6] Wal-Mart Stores, Inc. (2008a).
[7] Wal-Mart Stores, Inc. (2008b).
2.4
Economic Impact
The third dimension of a sustainable business is economic impact. The economic impact of a business’s operations is viewed internally and externally. The sustainable business will consider its
own economic impact on the communities in which it operates, such as job creation, impact on local
wages, impact on real estate in close proximity to the business, tax flows, investment in
disadvantaged areas, impact on public works and social services systems, and other indicators that
the business has positively contributed to local economic growth while maintaining corporate
profitability. Economic impact does not refer to the profitability of the business as indicated on the
financial statements, although profitability is critical for survival. The sustainable business will also
look externally at suppliers to ensure they are engaged across the supply chain with other companies
that share similar values and practices. It is assumed that the sustainable business’s contribution to a
strong and healthy local economy will lead to a strong and healthy future for the business.
The El Dorado Promise, a strategic philanthropy initiative of Murphy Oil Corporation, is an inspired
example of corporate economic impact.[1] Murphy Oil Corporation, a Fortune 500 company, is
headquartered in El Dorado, Arkansas, a small, rural township with an estimated population of
20,341.[2] In order to address the interrelated problems of declining industry, population, school
enrollment, and talent pool from which to draw, Murphy Oil Corporation announced that it would
donate $50 million to a scholarship program for local students, creating the El Dorado Promise
program. The program is expected to provide scholarships to students for the next 20 years.
One year after announcing the Promise program, there was an 18% increase in college-bound
seniors.[3] After 2 years, the community has seen a 4% increase in school enrollment, the local
community college has seen a 16% increase in enrollment, and families from more than 28 states and
10 foreign countries have moved to El Dorado.[4]
The inspiring examples of TOMS Shoes, Wal-Mart, and Murphy Oil Corporation demonstrate the
significant impact a company can have in pursuing any of the dimensions of sustainable business. In
each of these examples, we see how the social, environmental, or economic commitment has become
Business: Case Examples" of this book, we provide an array of additional examples that we hope will
inspire your own business to begin its journey toward sustainability.
[1] Landrum (2008).
[2] U.S. Census Bureau (2007).
[3] Hillen (2007).
Chapter 3
Human Resources
Integrated, innovative human resource practices are essential in creating a corporate culture that
ensures sustainability is valued and maintained at all levels of the organization. Such practices have
the ability to generate a significant social, environmental, and economic impact. To achieve a
competitive advantage in business, it is imperative for organizations to place high priority on their
internal human capital. Chapter 3 "Human Resources" examines human resource issues in
recruitment and selection, training and development, performance appraisal and feedback, pay and
3.1
Recruitment and Selection
The sustainable organization will be a community employer whenever possible. Recruitment and
selection generates a social and economic impact on the community. Corporations want to find
qualified workers and many times will use national recruiting agencies. Bringing in new employees
from outside the community can provide a social benefit by increasing the number of residents for
the community, which, in turn, increases spending in the community, housing starts, improvements
in infrastructure, and growth of programs. On the other hand, hiring within the community
decreases unemployment numbers and sustains the social and economic quality of life. Employment
not only creates a means by which to live, but it also increases skills within the area that develops a
stable labor pool for hiring. Sustainable companies should act as a community employer; they can be
socially responsible to current employees by filling upward mobility positions internally and
promoting from within whenever possible.
Recruiting tools such as Web sites, videos, presentations, and literature should include the
company’s philosophy on sustainability. In particular, recruiters need to make the company’s
environmental stance a priority in promoting the firm to potential applicants. In the advertisement,
bring attention to any successful environmental endeavors or any awards won for environmentalism.
However, it is important that recruiters not inflate environmental claims of the company, which is
termed greenwashing (to be discussed further in Chapter 6 "Marketing").
In addition to traditional recruitment outlets, choose magazines or trade journals whose audience is
open to sustainability issues. There are several print and online sites focused on the recruitment of
individuals seeking employment with a sustainable business (see Note 3.1 "Sustainability
Recruitment"). These specialty recruitment services bring together sustainable companies with
sustainability-minded potential employees.
Sustainability Recruitment
Acre
Business for Social Responsibility
Corporate Responsibility Officer
CSRwire
Ethical Corporation
GreenBiz
Green Dream Jobs
Idealist
Net Impact
Stopdodo
Sustainable Industries
The availability and use of online recruiting and online application submissions are increasing in
firms that have sustainability as a core value in order to save on printed materials and mailings.
However, if printing is necessary, brochures and other recruiting literature should use recycled stock
with soy-based inks and include that fact on the document itself.
The firm’s selection criteria should be aligned with sustainability criteria. A thorough needs
assessment and job analysis will provide insight into the knowledge, skills, and abilities that will
facilitate accomplishment of sustainability. The best candidates for employment will have a
propensity toward sustainable views and will indicate an “organizational fit” for the company and its
goals. Job descriptions will reflect appropriate requirements for jobs that require a more substantial
knowledge of sustainability such as purchasing, marketing, and fleet management, to name a few.
Interviewing can also be made more environmentally friendly. Several Web sites, such as
GreenJobInterview.com,[1] have been developed to assist in conducting synchronous or
asynchronous virtual interviews with candidates that can reduce transportation costs and associated
carbon emissions.
The sustainable firm is definitely an equal opportunity employer. The principle of fair and equal
unfair or discriminatory questions and requirements. Companies are putting focus on diversity
because it plays an important role in the reputation of the firm, in decision making, in relationships
with suppliers and other stakeholders, and in the hiring processes. The advantage comes from the
diversity of ideas and values that stimulate innovation. Women and minorities have been projected
to enter the workforce in increasing quantities in the future. A company runs the risk of missing high
quality employees if equal opportunities in the company are deficient.
3.2
Training and Development
New employees must be oriented to the company’s stance on sustainability issues and what the
expectations are for the employee to further sustainability efforts. The company, however, will
continue to conduct sustainability training for all employees at all levels, including management. Sustainability curricula have been developed by the nonprofit organization Northwest Earth Institute
and are appropriate for workplace training.
Companies have historically provided ethics, diversity, and leadership training, but sustainability
education and training must reorient the way employees view their jobs and the business. Employees
should ultimately be trained to rethink every aspect of the job and workplace in terms of
sustainability: relationships between systems; long-term survival and quality of life for social,
economic, and environmental systems; reduced waste, pollution, and toxicity; increased efficiencies;
increased harmony of the person and business with other social, economic, and environmental
systems; and innovative ways to reduce, reuse, and recycle. Increasing employee awareness fosters
creative solutions to business problems through a sustainability lens.
In addition to general training to help employees understand sustainability concepts, employees can
be taught sustainability-related skills specific to the job function. This might include triple bottom
line accounting, carbon accounting, social accounting, carbon finance, life cycle analysis, life cycle
costing, benchmarking, and other sustainability-related skills relevant to job duties (each of which
we discuss within the relevant chapters).
Sustainable organizations can create green training facilities and conduct green meetings. In
particular, meeting rooms should be energy efficient by using energy efficient lighting, motion
detectors for lighting, and ENERGY STAR computers and equipment. Companies can seek to
minimize the number of handouts or papers, use only recycled paper, and reduce and recycle waste.
If food is served, the organization should use vendors that supply organic food grown or raised
locally. If your company will conduct meetings at hotels or other companies’ facilities, make sure the
supplier provides green meeting facilities and services. When hiring others to provide training,
Training can be conducted either on the job or off the job. Businesses focusing on sustainability are
increasingly conducting more on-the-job training and engaging in travel reduction programs. Virtual
conferences are growing in popularity due to their reduced economic and environmental impact. In
addition, video conferencing is growing in popularity for the same reasons. For example, Vodafone, a
telecommunications company, uses video conferencing in order to reduce company-wide travel. It is
estimated that the use of video conferences eliminates 13,500 flights per year and 5,500 tons of
carbon emissions for the company.[1] Within one year, the dollars saved under this initiative
provided a return on the investment.[2] Products, such as GoToMeeting.com,[3] are available to
facilitate Web conferencing and virtual meetings.
E-learning, virtual classrooms, and computer- or Web-based learning environments have many
advantages. These options allow trainees to perform at their own pace, they offer multimedia
capabilities, they save costs, and they can standardize learning across locations. These forms of
training are an efficient way to deliver learning content, and the organization can track employee
training performance through scores and completions. Again, these forms of training will reduce
travel and associated economic and environmental costs.
Companies are increasingly using Webinars, or seminars on the Web, for training. Due to the
popularity of Webinars offered by third-party trainers, there are often many from which to choose
(both free and paid). In a live Webinar, there are typically a small number of participants, which
allows for more interaction and involvement. In many cases, live Webinars are archived on the
Internet for later viewing. Companies can also use GoToWebinar.com[4]to host their own Webinar.
Particularly effective training tools are simulations, or situations that replicate job demands. Several
industries, such as airline, health care, emergency services, and law enforcement, have frequently
utilized simulations. This has resulted in cost savings associated with equipment and travel and a
reduction in accident rates.[5] Sustainable organizations that engage in off-the-job training should
contract specifically with those that can make claims to being green service providers.
In addition to company-sponsored training and development opportunities, sustainable businesses
own personal development. This requires respecting the employee’s need for personal growth,
development, and fulfillment and allowing reasonable opportunity to pursue those needs. Some
companies accept spirituality in the workplace; others allow ample time for community service and
involvement (whether paid or unpaid by the company). Other companies may encourage employees
to use their job-related skills for professional service through a variety of nonprofit organizations
(see Note 3.3 "Use Your Business Skills to Make a Difference").
Use Your Business Skills to Make a Difference
There are a number of nonprofit organizations that seek out business persons to donate their valuable professional skills:
Business Council for Peace
CEOs Without Borders
Diplomats Without Borders
Financial Services Volunteer Corp
Geekcorps
International Executive Service Corps
MBA-Nonprofit Connection
MBAs Without Borders
Net Impact
New Ventures
Taproot Foundation
TeamMBA
TechnoServ
Wall Street Without Walls
Lastly, beyond training employees for a specific company’s needs, there exists a worldwide shortage
of potential employees with the proper skills to further the development of a green economy and the
green economy. Job training programs, colleges, and universities are beginning to recognize this
deficit and create training and education programs to help develop a green workforce. In addition,
professional organizations, such as the International Sustainability Professionals Society, are beginning to emerge.
Green-collar jobs refer to the modification of blue-collar jobs by incorporating new environmentally related knowledge, skills, and abilities into positions that will aid in the transition to a green
economy. The demand for green-collar, technical, and professional workers is expected to continue
experiencing rapid growth and increasing demand.[7] As proof, the renewable energy industry grew
more than 3 times as fast as the U.S. economy in 2007 and renewable energy and energy efficiency
are expected to generate millions of jobs for both professional and technical workers.[8] Extensive
information on green-collar jobs can be obtained from the nonprofit organizations Green For All and
Apollo Alliance.
[1] Creamer Media (n.d.).
[2] Creamer Media (n.d.).
[3] Retrieved January 30, 2009, from https://www2.gotomeeting.com
[4] Retrieved March 23, 2009, from http://www.gotowebinar.com
[5] Svoboda and Whalen (2005).
[6] LaMonica (2008); Murray (2008).
[7] Jones (2008); O’Carroll (2008).
3.3
Performance Appraisal and Feedback
Most companies engage in the traditional performance appraisal system where the employee’s
performance is measured on some prescribed criteria. The purpose of performance appraisals is
generally to provide feedback to the employee on his or her performance in order to correct any
deficiencies and to create increased opportunities. Employees are not always satisfied with the
performance appraisal process. However, some form of assessment is needed to provide feedback for
improvement. Recognition of performance levels can serve to motivate workers toward higher levels
of performance or more creative solutions to problems.
Some companies have tied performance appraisals to sustainability performance. Identification of
performance dimensions is an important first step in the process. Performance criteria should be
directly tied to business goals and objectives. Measures should be meaningful and controllable. Since
one of the sustainable organization’s goals is to pursue triple bottom line performance, performance
appraisal dimensions should reflect the importance of sustainability in the criteria. Management can
weight the various economic, social, and environmental criteria higher than other criteria in order to
indicate the importance of sustainability to the employee. Performance management should hold
managers accountable for meeting sustainability goals through employees.
Trait, behavioral, and outcome appraisal instruments can be altered to include sustainability criteria.
Trait appraisal instruments ask the supervisor to make judgments about characteristics of the
employee. Typical traits are reliability, energy, loyalty, and decisiveness. Organizations can add traits
such as efficient, honesty, or communicative to depict traits the company would like to see employees
exhibit. Behavioral appraisal instruments are developed to assess workers’ behaviors, such as ability
to work well with others, promptness, and development of personal skills. Sustainable examples
might be working toward reducing waste or consciously using techniques that reduce negative social
impacts. Finally, outcome appraisal instruments assess results. In addition to total sales or number
of products produced, sustainable companies can assess energy usage, amount of miles saved on
In line with other areas of human resources that suggest online or Web applications, performance
appraisals are no different. Organizations can use Web-based performance appraisal software, such
as Halogen eAppraisal[1] or EmpXtrack,[2] to prevent excess use of paper products and to increase
transparency of the process.
Essential to the success of performance appraisal systems on sustainable performance is the
cooperation and approval of the employees. The employee must feel that the assessment process will
lead to the improvement of the overall sustainability of the company. The need for employee buy-in
may require the company to engage in capacity-building activities. One consulting firm suggests
capacity-building activities such as providing access to various databases, libraries, or Web sites;
creating publications; conducting training; providing consultation; coordinating alliances; and
implementing team-building tasks.[3]
[1] Retrieved January 28, 2009, from http://www.halogensoftware.com
[2] Retrieved January 28, 2009, from http://www.empxtrack.com/performance-management-system
3.4
Pay and Benefits
Pay and benefits policies promoted by the organization will have a great social and economic impact
on employees and communities. For example, company policies and practices can transfer the
burden to and add stress on local social services systems as a result of inadequate wages and
benefits.
The sustainable organization would benefit from ensuring the compensation structure is fair and
equitable. Fair pay can be viewed internally and externally to the organization. Internal equity exists
when the employees generally perceive fairness in the pay structure across employees. External
equity refers to the perceived fairness of pay relative to what other employers are paying for similar
labor. The ability to ensure the fairness of compensation is a difficult task. Sustainable companies
want to attract the best employees by paying above-market compensation yet remain fair to existing
employees with tenure. The organization should conduct pay studies annually to ensure programs
remain competitive and implement an annual review cycle for ongoing monitoring. Managers can
access salary data through online compensation surveys, such as those available at
HR.com,[1] Salary.com,[2] or SalarySource.com,[3] which provide information by location, industry,
position, and work experience.
Companies have a choice to develop compensation systems based upon anelitist system (that which establishes different compensation plans for different employee groups) or
an egalitarian system (having most employees under the same equal compensation plan). An
egalitarian system is beneficial to highly competitive environments where companies are innovative,
risk-taking, and continuously investing in new technologies and projects, which is typically how
sustainable companies work. This type of compensation system provides more flexibility in
employment by creating fewer differences between employee grades, creating a flatter organizational
chart, and minimizing status-dependent perquisites. Fewer differences in compensation plans
should result in increased task accomplishment and cooperation among employees by reducing
Transparency is a cornerstone of the sustainability movement. Even though companies can be
transparent in accounting and financial reporting, transparency can also be achieved by
communicating openly about policies and practices related to compensation and employment
practices. When compensation practices are hidden from employees, they tend to perceive more
underpayment than is actually real. Employees tend to compare their pay and benefits to other
employees and may inflate any discrepancies they believe they see, thereby causing more
dissatisfaction, less productivity, increased absenteeism, and turnover. Transparent compensation
plans make management more fair in administering the compensation.
Sustainable organizations should also ensure they pay living wages rather than minimum wages.
Minimum wage is set by legislation to be a minimum dollar amount per hour that must be paid by
law. By contrast, living wage is the minimum income necessary for a person to attain a specified
quality of life given the location and other economic factors where the person is employed. Living
wages are generally higher than minimum legal wages. Sustainable firms will recognize the value of
living wages in maintaining a productive and sustainable workforce.
In addition to providing living wages, sustainable businesses provide important benefits necessary
for employee quality of life. Standard benefits packages, such as health insurance, dental insurance,
and paid sick leave, are supplemented with additional benefits addressing work–family balance.
Employees are considered to be more satisfied and productive with increased quality of work and
home and community life. Sustainable organizations tend to establish work initiatives such as child
care centers at the job, time off (leave) from work to care for sick children or elderly family members,
paternity leave for male employees, flextime work, telecommuting, job sharing, tax breaks for
commuting, and other employee-friendly benefits.
An example of a green employee benefit is demonstrated through HEAL Arkansas, a program started
at the Addison Shoe Factory in rural Arkansas. After realizing that many employees spent up to 50%
of their income on energy bills, the company implemented an energy-efficiency employee benefit
that could help reduce energy bills, increase disposable income, increase quality of life for its
employees for energy-efficiency home improvements. Employees receive home energy audits with
recommendations on how to improve home energy efficiency. Loans are repaid through payroll
deduction, which is offset by the employee’s energy bill savings.
One specific employee benefit of interest to the sustainable business is the
commuter-choice tax benefit. The federal tax code (IRS, section 132f) allows employers to provide commuter-choice tax benefits to employees. Employees who commute to work through transit or car/vanpool
can set aside up to $230 per month in pre-tax dollars for commuting expenses and up to $230 per
month in pre-tax dollars for parking expenses. The employer can then also claim a tax deduction for
the expense. Because the value of the benefits paid to employees is listed as a fringe benefit and not
listed as wage or salary, the cost of the benefit is therefore considered a business expense and payroll
taxes do not apply.
Another example of transportation benefits can be found at Clif Bar and Company, an organic food
company in Berkley, California. The company distributes points to employees for selecting alternate
modes of transportation to work, such as walking, biking, carpooling, or mass transit. The employees
are then able to redeem those points for gift cards, company merchandise, coffee shop items, public
transportation passes, or carbon offsets from various organizations that spend the money on projects
such as reforestation, renewable energy research, or energy-efficiency technology. Clif Bar and
Google, among other companies, actually provide employees an incentive to purchase green vehicles.
Clif Bar will provide up to $5,000 to an employee for the purchase of a qualified car; the loan is
provided up front and written off at $1,000 per year.[4]
An imperative for a sustainable organization’s human resource department is flexibility. One strategy
would be to hire contingent workers—employees hired to deal with temporary increases in workload
or to complete work that is not part of the core requirements. Contingent workers are generally the
first to be dismissed when an organization experiences a downturn. On the one hand, contingent
employees provide protection for the full-time employee who might otherwise have been laid off
during the downturn. On the other hand, the use of contingent workers ultimately creates a negative
affect work performance. An additional human resource for hire would be interns, which would
provide a positive social impact for both the individual and the company.
More sustainable ways to provide human resource flexibility can be accomplished through flexible
work scheduling such as flexible work hours, compressed workweeks, or telecommuting. Flexible
work scheduling can be accomplished through flexible work hours (flextime) where employees can
choose to organize work routines that fit with their personal activities and lifestyles as opposed to the
traditional workday hours. Compressed workweeks change the number of workdays per week by
increasing the length of the workday, which, in turn, reduces the number of days required in a typical
workweek. Compressed workweeks have the potential to positively impact the work–life balance and
reduce stress for employees by providing extra time for families and activities. When implemented
effectively, compressed workweeks have the potential to lower employee absenteeism and turnover
rates for organizations. To date, several city, county, and state governments as well as numerous
companies have implemented 4-day workweeks for employees with the anticipation of decreased
energy and transportation costs and increased employee satisfaction and retention.
Telecommuting provides flexibility in both the hours and the location of work. Employees spend at least one day a month or more working from home while maintaining their connection to the office
by phone, fax, and computer. Many employees, particularly highly extroverted individuals, may be
more productive when they remove themselves from multiple distractions. Related to telecommuting
is a practice called “office hoteling” or “hot desking.” Office hoteling is the creation of a software
reservation program that reserves office space to employees on an as-needed basis rather than in the
manner of the traditional, permanent office space setup. Hot desking involves providing a desk that
is shared between several people at different scheduled times. These practices reduce the amount of
physical space, which lowers overhead cost and prevents resource hoarding or the underutilization of
resources. From an environmental perspective, these methods result in reduced traffic and pollution
as well as reduced energy consumption and costs for the company.
[2] Retrieved January 28, 2009, from http://salary.com
[3] Retrieved January 28, 2009, from http://www.salarysource.com
3.5
Labor Relations
Labor relations refer to the interaction between the company and the employee, particularly related to the employee’s right to organize. A sustainable company will take a broader view of labor relations
and interpret the term to include the protection of labor and human rights with regard to the impacts
of business.
Operating within the law has benefits beyond simple legal compliance. A sustainable organization
does so because it believes it is the right thing to do for the welfare of the organization and its
employees. The human resources department has a large responsibility to keep records, maintain
policies, and monitor actions to ensure that employee human rights are protected. Multinational
companies operating in emerging economies are especially vulnerable to pressures to exploit the
laws, or lack thereof, in other countries. Sustainable organizations practice good citizenship and high
ethical standards because it is the right thing to do.
The International Labour Organization has put forth theInternational Labour Rights Standards by which member states are expected to abide. In addition, there are numerous nonprofit organizations
tracking and reporting on working conditions and human rights issues around the world, including
Global Exchange, Human Rights Watch, International Labor Rights Forum, and Sweatshop Watch.
A sustainable organization promotes diversity and nondiscrimination. Employee diversity can
improve the effectiveness and efficiency of an organization by stimulating greater creativity and
improving problem solving. In an organization that values a broader, fuller array of experiences,
cultural viewpoints, and values, there is greater potential
